Abagnale Enterprises will ship all of the USA athletes' gear to Russia for the Olympics. The company has the following historical information based on similar trips taken overseas: Trip Nautical Miles Operating Costs 1 500,000 $356,000 2 580,00 380,000 3 $420,000 660,000 What is the best estimate of total operating costs using the high-low method if the expected mileage for the trip to Russia is 590,000 miles? a. $236,000 b. $375,455 c. $386,552 d. $386441 e. $392,000

Abagnale Enterprises will ship all of the USA athletes' gear to Russia for the Olympics. The company has the following historical information based on similar trips taken overseas: Trip Nautical Miles Operating Costs 1 500,000 $356,000 2 580,00 380,000 3 $420,000 660,000 What is the best estimate of total operating costs using the high-low method if the expected mileage for the trip to Russia is 590,000 miles? a. $236,000 b. $375,455 c. $386,552 d. $386441 e. $392,000

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 11P: Emerald Island Company is considering building a manufacturing plant in County Kerry. Predicting...

See similar textbooks

Similar questions

Nashville Co. presently incurs costs of about 12 million Australian dollars (A$) per year for research and development expenses in Australia. It sells the products that are designed each year, and all of the products sold each year are invoiced in U.S. dollars. Nashville anticipates revenue of about $20 million per year, and about half of the revenue will be from sales to customers in Australia. The Australian dollar is presently valued at $1 (1 U.S. dollar), but it fluctuates a lot over time. Nashville Co. is planning a new project that will expand its sales to other regions within the United States, and the sales will be invoiced in dollars. Nashville can finance this project with a 5-year loan by (1) borrowing only Australian dollars, or (2) borrowing only U.S. dollars, or (3) borrowing one-half of the funds from each of these sources. The 5-year interest rates on an Australian dollar loan and a U.S. dollar loan are the same. If Nashville wants to use the form of financing that will…
See picture
A piece of laborsaving equipment has just come onto the market that Mitsui Electronics, Ltd., could useto reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow (currency is inthousands of yen, denoted by ¥):Purchase cost of the equipment ............. ¥432,000Annual cost savings that will beprovided by the equipment .................. ¥90,000Life of the equipment .............................. 12 yearsRequired:(Ignore income taxes.)1. Compute the payback period for the equipment. If the company requires a payback period of fouryears or less, would the equipment be purchased?2. Compute the simple rate of return on the equipment. Use straight-line depreciation based on theequipment’s useful life. Would the equipment be purchased if the company’s required rate of returnis 14%?
1. Refer to the original data. Assume again that Polaski Company expects to sell only 25,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only purchase of 5,000 Rets. The Army would pay a fixed fee of $1.80 per Ret, and it would reimburse Polaski Company for all costs of production (variable and fixed) associated with the tmits. Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this order. If Polaski Comprany accepts the order, by how much will profits increase or decrease for the year? 2. Assume the srune situation as that described in requirement 2, except that the company expects to sell 30,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 5,000 Rets. If the Army's order is accepted, by how much will profits increase or decrease from what they would be if the 5,000 Rets were sold through regular…
Suppose that a manufacturer can produce a part for $11.00 with a fixed cost of $7,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $13.00, which includes transportation. a. If the anticipated production volume is 1,300 units, compute the total cost of manufacturing and the total cost of outsourcing. b. What is the best decision? a. The total cost of manufacturing is $.
can you please help me figure this out
Randall's Ales & Porters S.A., is considering expanding into Costa Rica. As an incentive, Costa Rica agrees not to charge the company any taxes. The project has the following estimated data: price = $94 per unit variable costs = $50.76 per unit fixed costs = $7,600 required return = 16 percent initial investment = $11,000 life = three years depreciable life = three years, straight-line. Required: (a)What is the accounting break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥ (b)What is the cash break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥ (c) What is the financial break-even quantity? (Do not round your intermediate calculations.) (Click to select) ♥
Standard Oil Company owns two oil fields. Field 1 can produce up to 20 million barrels of oil per day, and Field 2 can produce up to 15 million barrels of oil per day. At Field 1, it costs $37.50 to extract and refine a barrel of oil. At Field 2, it costs $41.20 to extract and refine a barrel of oil. Standard sells oil to two countries: Australia and Argentina. The shipping costs per barrel are show in the table below.Cost per barrel of shipping ----------------Australia-------ArgentinaField 1---------$5.50-----------$6.80Field 2---------$4.20-----------$5.30Each day, Australia is willing to buy up to 10 million barrels of oil at $65.80 per barrel, and Argentina is willing to buy up to 25 million barrels of oil at $68.40. How does Standard Oil maximize its profits?
Global Reach, Inc., is considering opening a new warehouse to serve the Southwest region. Darnell Moore, controller for Global Reach, has been reading about the advantages of foreign trade zones. He wonders if locating in one would be of benefit to his company, which imports about 90 percent of its merchandise (e.g., chess sets from the Philippines, jewelry from Thailand, pottery from Mexico, etc.). Darnell estimates that the new warehouse will store imported merchandise costing about 16.78 million per year. Inventory shrinkage at the warehouse (due to breakage and mishandling) is about 8 percent of the total. The average tariff rate on these imports is 5.5 percent. Required: 1. If Global Reach locates the warehouse in a foreign trade zone, how much will be saved in tariffs? Why? (Round your answer to the nearest dollar.) 2. Suppose that, on average, the merchandise stays in a Global Reach warehouse for nine months before shipment to retailers. Carrying cost for Global Reach is 6 percent per year. If Global Reach locates the warehouse in a foreign trade zone, how much will be saved in carrying costs? What will the total tariff-related savings be? (Round your answers to the nearest dollar.) 3. Suppose that the shifting economic situation leads to a new tariff rate of 13 percent, and a new carrying cost of 6.5 percent per year. To combat these increases, Global Reach has instituted a total quality program emphasizing reducing shrinkage. The new shrinkage rate is 7 percent. Given this new information, if Global Reach locates the warehouse in a foreign trade zone, how much will be saved in carrying costs? What will the total tariff-related savings be? (Round your answers to the nearest dollar.)
A US multinational corporation has operations in Bolivia through which it plans to sell a new product of 500,000 cans of beans per year for the next 3 years, at a price of BOB 4 per can after incurring a variable cost of BOB 2.50 per can. The company will also incur a fixed cost of BOB 120,000 per year. The company has invested BOB 900,000 today in manufacturing equipment for its Bolivian operations, which will be depreciated at $300,000 annually over its 3-year life. The corporation's required rate of return (WACC) is 20% and has a tax rate of 25%. The spot rate was BOB 6.91/$ before it unexpectedly changed to BOB 7.25/$. What is the value of the Bolivian operations prior to the unexpected change in the spot rate assuming that the operations have a 3-year life only? (round to the nearest dollar) US$237,699 US$107,453 US$159,076 88 US$166,903
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 46,000 Rets per year. Costs associated with this level of production and sales are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 20 6 3 7 4 6 $ 46 Total $ 920,000 276,000 138,000 322,000 184,000 276,000 $ 2,116,000 The Rets normally sell for $51 each. Fixed manufacturing overhead is $322,000 per year within the range of 38,000 through 46,000 Rets per year.
Suppose the transportation cost to send a 2000 lb shipment from St. Louis to Tampa $3500. 1. Compared to the transportation cost for the 2000 pound shipment, the transportation cost to send a heavier shipment would likely be a) greater.b) less.c) the same. 2. Compared to the transportation rate for the 2000 pound shipment, the transportation rate to send a heavier shipment would likely be a) greater.b) less.c) the same.